Why Startups Need HR Strategies

Human Resources doesn’t have to be overwhelming for growing startups and small and medium size businesses. There are ways to organize your human resources operations, while still being flexible. And that includes the option of outsourcing human resources services. Let’s look at why startups need HR strategies.

With nearly half of all small businesses failing in the first four years, you might think that an HR department would have a negative impact on the company’s bottom line before it ever gets off the ground. While there are a myriad of reasons a new startup might fail, ignoring the importance of a human resource strategy is a major undoing of startups.

People make your business go, so making sure that you are finding the right people and managing their productivity and focus should be your number one priority. You can organize the HR strategy for your startup so it creates a flexible environment that allows your company to operate the way you need it to. For startups, greater flexibility is key—your organization can build an HR solution that meets the needs of your company while maintaining flexibility for your employees. The role of HR in a startup is still to provide some much-needed structure, help you mitigate risk, and give your team a leg up. Remember, your top priority is building and maintaining a healthy, safe, and productive workplace.

Here are three basic tenets you should strive for:

1. Keep People Safe: Observe the various operations your employees participate in and assess the risks involved.
2. Provide Pay and Benefits: Pay your employees on-time and accurately, and offer relevant benefits, such as health/vision/dental insurance, paid time off, and life insurance.
3. Understand the Law: Make sure you stay updated on employment rules (medical leave, parental leave, etc.) and laws like the Americans with Disabilities Act and the Equal Pay Act, then establish clear policies to help employees understand their rights and the organization’s expectations.

Without an HR strategy in place for your startup, you risk allowing negativity and toxic work habits to establish themselves in the workplace, leading to reduced employee morale and low employee retention.

Here are a few of the main roles of HR, in-house or outsourced, that will keep your startup running smoothly.

• Legal Protection: One of the primary roles of HR is to make sure your startup is complying with state and federal laws and regulations so you’re protected from potential lawsuits.
• Talent Acquisition: A good HR department will help you hire the right employees and ensure there are structured onboarding procedures in place.
• Record Keeping: HR departments are responsible for keeping business records, resumes, sensitive information, and performance evaluations; for tracking sick time, vacation time, and workplace accidents; and for keeping other records.
• Policy Creation: HR policies provide employees with a structured work environment. Your HR department might consider creating policies on tardiness, benefits, employee evaluations, discipline, internet policies, dress and grooming standards, holiday leave, and more.
• Employee Training: Training new employees not only helps you beat your competition, it is also a major factor in employee retention. According to LinkedIn’s 2018 Workplace Learning Report, 94% of employees would stay at a company longer if they invested in their career development.
• Company Culture Development: One of the roles of HR in a startup is to make sure the company lives up to its values by hiring people that align with the company’s vision.

Startups with strong HR strategies and practices are better positioned to develop and retain employees, and both are important for business growth.

Let us help you grow your business. From 1 to 50+ employees, HRO Resources is your single source solution for human resource services ~ from health insurance, 401K, and payroll processing to tax filing, time and attendance software, HR compliance and more. Request a demo.